Work on the first building in the development formerly known as Atlantic Yards has frozen after the contractor let it go.
The Swedish construction company Skanska halted construction last week on the high-rise building B2 at the corner of Flatbush Avenue and Dean Street, citing problems with the tower’s touted modular design. But Forest City claims Skanska is to blame for schedule and cost overruns and sued the builder last week to try forcing it to restart construction as it furloughed workers on the site and in the Navy Yard factory where the units were being assembled. The situation is now a standoff with no end in sight as Skanska has lodged a countersuit demanding $50 million for what it claims are the developer’s faulty plans.
Forest City now claims it wants to take over the factory that it has shared with Skanska and put the out-of-work employees back in action.
“We strongly believe as a joint venture, we have an obligation to the 157 workers who have lost their jobs because of the unauthorized, forced furlough that you, as managing member, have imposed on them,” Forest City head MaryAnne Gilmartin wrote in a letter to Skanska.
A Skanska honcho griped that the takeover offer was a “propaganda exercise” meant to divert discussion of “commercial and design issues.” Skanska has so far not elaborated on those issues beyond a description in the lawsuit saying that “numerous design errors and omissions exist in the B2 design, including but not limited to, errors and omissions affecting the modules, the steel frames of the modules, the vertical alignment of modules in the field, the facade panels and their alignment, and/or the process of handling and assembling modules and other components.”
In its lawsuit, Skanska accuses Forest City of “providing a design for the B2 project which contained errors and omissions.” The suit also claims the developer did not properly set up the modular component factory and has not proven that it can pay Skanska for building.
The developer pointed the finger back at Skanska.
“Skanska and the personnel it assigned to this project lacked the skill, experience and diligence to complete the project in accordance with the promised schedule and price,” says Forest City’s complaint.
The developer’s suit also states that Skanska agreed to the B2 plans when it took the job and that it is responsible the building’s delays and the higher costs they caused.
A Forest City spokeswoman addressing a community meeting on Thursday summed up the feud this way:
“You can read about it,” rep Ashley Cotton said. “But it’s lots of details about a contractor and an owner, in many ways, pointing fingers at each other.”
Local pols took Forest City’s side in the dispute, saying Skanska should let the company take over the operation to keep the affordable housing in the project rising and keep the workers working.
“It is unacceptable that a financial dispute has left more than 150 workers unemployed, jeopardizing the economic stability of their families and further delaying the construction of affordable housing units in Fort Greene,” said Borough President Adams, Councilwoman Laurie Cumbo (D–Fort Greene), and Councilman Brad Lander (D–Park Slope) in a statement. “The completion of the modular apartment tower is vital to the working families who have waited years for promises to become a reality. Forest City Ratner has proposed reopening the factory immediately and assuming responsibility to resume operations, to keep this job on track and individuals employed while the courts hear the broader issue.”
The dispute means there is no end in sight to work on the 32-story, 363-apartment B2, half of which is supposed to rent at below-market rates. When ground broke on the building in December 2012, Forest City said it would finished by this August. The building currently stands 10 stories tall.
The detente could also affect the timeline of the larger 16-tower mega-development, which Forest City and its Chinese-government-owned partner Greenland have said will be completed by 2035. The latest projected deadline is nearly two decades later than Forest City’s original claim that it would be done by 2016.
The two companies agreed in June to finish all the promised below-market dwellings by 2025 or face fines from the state.
A Greenland spokesman broke the company’s silence on Monday to deny that the feud will affect the rest of the project. Another building is on track for a December ground-breaking, he said.
Greenland owns a 70-percent stake in the un-built portion of the project, but does not have a say in what goes on with the Barclays Center or B2.
Forest City and Greenland have asked the public to refer to the development as “Pacific Park.”
